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Speed traders eyed after Twitter hack attack: regulator

A man types on a computer keyboard in Warsaw in this February 28, 2013 illustration file picture. REUTERS/Kacper Pempel/Files
(Copyright Reuters 2013)

WASHINGTON – The phony tweet from the Associated Press' hacked Twitter account, which sparked a short-lived panic in the stock market a week ago by saying that President Barack Obama was injured in two explosions at the White House, underscored the need to look at regulating automated trading, the top U.S. derivatives regulator said on Tuesday.

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"I think that we do need to finalize a concept release that we've been working on for many moons here at the CFTC," Commodity Futures Trading Commission Chairman Gary Gensler told a public meeting of the agency on Tuesday.

Hackers took control of the AP's Twitter account on April 23 and sent a false tweet about explosions in the White House that briefly wiped out $136.5 billion of the S&P 500 index's value before markets recovered.

People in the market blamed automated trading for the wild swings.

The CFTC first announced it would come out with a concept release on high-frequency trading and other market structure issues last year.

But last week's events had reminded Gensler of the urgency of the report, he said.

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Gensler said he hoped to put the concept release out in the next month or two, adding that the CFTC would seek public comments on it. A concept release constitutes the first tentative step toward possible rulemaking.